According to statements released by Washington and Taipei, the United States and Taiwan have agreed to launch negotiations on a new investment and trade pact. The US-Taiwan Initiative of the 21st Century Trade was unveiled in June after US President Joe Biden excluded Taiwan from the Indo-Pacific Economic Framework. 

The negotiations will cover 11 topics including regulatory practices, SMEs, trade facilitation, agriculture, standards, digital trade, labor, state-owned enterprises, environment, and non-market policies and practices. Both sides are also expected to discuss ways to address China’s economic coercion according to Taiwan’s trade representative John Deng. 

Beijing has opposed the negotiation of economic and trade agreements with Taiwan that have sovereign connotations or are official in nature and urged the United States to abide by the one-China principle on Thursday. Beijing and Washington have experienced heightened tensions after Speaker of the House Nancy Pelosi visited Taiwan earlier this month. China has restricted some trade with Taiwan in retribution and escalated military drills in the area. Analysts have warned that a further escalation of military activity around Taiwan could disrupt global trade. 

Through the trade agreement, Taiwan and the US are hoping to deepen their trade relations, increase foreign investment, and increase Taiwan’s economic competitiveness.

Read more: US and Taiwan agree to start talks on a trade and investment pact